ICE Stocks Highest Since October

COCOA

May Cocoa is higher this morning after falling below the 200-day moving average for the first time since October on Friday. As in October, the market failed to close below that line on Friday and subsequently bounced off that level. Ivory Coast port arrivals totaled 13,000 metric tons for the week ending March 23, down from 14,000 the previous week. Cumulative arrivals for 2024/25 have reached 1.414 million tons, up from 1.284 million a year ago but below the five-year average of 1.596 million. This is the second lowest cumulative number in at least six years. World Weather Service expects Ivory Coast and Ghana to see some increased rain this week, with southern Nigeria and Cameroon trending wetter next week. Recent weeks have brought very good rain to Ivory Coast and Ghana, but Nigeria and Cameroon need more. ICE certified cocoa stocks increased by 16,301 bags on Friday to 1.785 million, their highest since October 29. Stocks increased 106,000 last week.

Reports last week that Ivory Coast’s mid-crop would be down 40% from last year offer a counter to the steadily increasing exchange stocks. The market may also have reached a key inflection point with its test of the 200-day moving average on Friday.

SUGAR

May Sugar was lower overnight having once again backed off from the 20-cent level. The market traded above that price four days last week  but never closed above it. The Brazilian real was lower on Friday after trading to its highest level since October on Wednesday. A strong real lowers the incentive for Brazilian producers to sell sugar for export, and sudden weakness in the currency could inspire some selling in sugar. South-Central Brazil soil moisture is the lowest in seven years, according to the LSEG Agriculture Weather Dashboard. World Weather Service expects most of Brazil to see some rain in the next 10-14 days, including the South Central region, which could be beneficial to the upcoming crop. The new crop harvest should be close to starting, as the new marketing year begins on April 1.

COFFEE

The coffee market was higher overnight as it continued to draw support from dry conditions in Brazil. World Weather Service said a small portion of Brazil’s coffee region saw rain over the weekend but that most coverage was light and not well distributed. They expect some rain later this week that could temporarily boost moisture, but they don’t expect a big change in trend. Last week, representatives with the Brazilian coffee co-op Cooxupe said that the below-average rain and high temperatures in February and early March will adversely affect the 2025 crop. Some areas in Minas Gerais and Sao Paulo states went more than 40 days without rain, and they faced temperatures above the historical averages. Cooxupe farmers are a month or so away from the start of the harvest. According to the LSEG Agriculture Weather Dashboard, soil moisture in South Minas Gerais is the lowest it has been for this period in seven years. ICE certified arabica stocks fell 4,781 bags on Friday to 777,708, their lowest since February 19. Stocks fell 19,000 contracts last week.

COTTON

May Cotton extended Friday’s range-down action overnight but is back near unchanged this morning. A lower dollar, higher equities, and higher crude oil prices all lend outside-market support. Traders were clearly disappointed with the market’s failure at the 50-day moving average last Monday and the disappointing export sales report last Thursday added to the pessimism. World Weather Service expects West Texas to get some rain late this week, but no general soaking is expected, leaving the regain in need of significant rain for planting. Forecasted rain amounts for South Texas and the Coastal Bend have been reduced from Friday. Next Monday the USDA will be releasing the US Prospective Plantings number for 2025/26. In their Outlook Forum in February, USDA put plantings at 10 million acres, down from 11.18 million in 2024/25. Friday’s Commitments of Traders Report showed managed money traders were net buyers of 6,793 contracts of cotton for the week ending March 18, reducing their net short to 69,617. This is up from a record net short of 79,957 from two weeks ago.

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